Best Junior Cash Isa 2015
Parents who are concerned about tax or simply want a savings vehicle their children cannot dip in and out of could do worse than a Junior Isa. These have a maximum annual contribution of £4,000 and, while children can take control of the account when they're 16, they can't withdraw the money until they turn 18.
Our winner this year is Coventry Building Society's Junior Cash Isa, which has a minimum deposit of just £1. "This account was launched on 5 April 2012 and since then has paid a straightforward rate of 3.25% – no bonus, no complications, just consistency," states Bowes.
Our runner-up is the Nationwide Smart Junior Isa, which pays 3.25% gross with a minimum deposit of £1.
Bowes says it is a simple, straightforward competitive account. "Nationwide removed the bonus from this account back in February 2014 and added a rate guaranteed not to fall below 1.15% until 31 Janaury 2015.
"Let's hope the guarantee is extended this year, so savers can be sure the rate won't plummet like many other savings accounts have done in recent years."
Best Junior Cash Isa 2015
Winner: Coventry Building Society Junior Cash Isa
Current rate: 3.25%
Minimum deposit: £1
Contact: 0845 766 5522 coventrybuildingsociety.co.uk
Highly commended: Nationwide Smart Junior Isa
Available from 1 November 2011, the Junior ISA will replace child trust funds (CFTs), which have been phased out. Junior ISAs will have a £3,000 limit and will be offered by high street banks, building societies and other providers that currently offer ISAs to adults. You can invest in either stocks and shares or cash. But, unlike CTFs, there will be no government contributions into each child’s savings pot. Money invested in Junior ISAs will be “locked in” until the child is 18, and the ISA will default to an adult one.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.